Money & Banking

Business correspondents to get minimum monthly pay of ₹5,000: IBA

K Ram Kumar Mumbai | Updated on August 27, 2014 Published on August 27, 2014

RBI survey shows that almost half of the agents are not traceable

To give the financial inclusion drive under the ‘Pradhanmantri Jan Dhan Yojana’ a fillip, banks will ensure that the foot soldiers (or business correspondents) undertaking the task on their behalf will get a minimum compensation of ₹5,000 per month.This move comes in the backdrop of a recent RBI survey that almost half of the business correspondent (BC) agents are untraceable.

So far, there were no guidelines governing remuneration for BCs, resulting in banks engaging corporate BCs who were least expensive.

According to Indian Banks’ Association Chief Executive MV Tanksale, individual BCs appointed by banks will get a minimum compensation of ₹5,000 per month.

This remuneration will motivate BCs in rural areas to reach out to vulnerable groups such as weaker sections and low-income groups so that they get universal access to financial services and timely and adequate credit.

The individuals/entities whom banks can engage as BCs include retired bank employees, retired teachers, retired government employees, individual owners of kirana/medical shops, agents of small savings schemes/insurance, non-government organisations, microfinance institutions (MFIs) set up under the Societies/Trust Acts and Section 25 Companies; and MFIs (which are classified as non-banking finance companies).

Tanksale also said that under the Pradhanmantri Jan Dhan Yojana, simplified mobile banking based on the service code ‘*99#’ will be launched. Using the service code, users can initiate funds transfer and check the balance in their bank account.

The service-code-based facility will work even on the most basic GSM mobile phone. It does not require users to download any software (application) for mobile banking.

Under theJan-Dhan Yojana, which will be launched by Prime Minister Narendra Modi on Thursday, banks, over the next one year, will be ensuring that every household in the country has at least one basic banking account.

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Published on August 27, 2014
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